Victims chastise Kelly Gearhart at hearing

June 2, 2015
Kelly Gearhart

Kelly Gearhart


Former North County developer Kelly Gearhart sat stone-faced Monday as eight of his financial fraud victims told a federal judge in Los Angeles how Gearhart showed no mercy for the elderly victims he preyed upon. Each of the victims then asked United States District Judge Otis D. Wright II to give Gearthart the maximum sentence allowable by law — 50 years in prison.

Gearhart and James Miller, the former president of Hurst Financial, defrauded more than 1,200 investors of more than $100 million in an alleged Ponzi scheme. Gearhart, now 55, bilked investors who put money into Central Coast real estate projects. Instead of developing the properties, Gearhart spent the money on his and his wife Tamara Gearhart’s extravagant lifestyle.

In 2014 Gearhart plead guilty to lesser charges which reduced the maximum sentence allowable by law from 300 years to 50 years in federal prison in a plea agreement in which the prosecution agreed not to prosecute Tamara Gearhart.


Kelly and Tamara Gearhart with a friend attempting to shield them from being photographed.

On Monday, Judge Wright agreed to extend Gearhart’s sentencing until a June 29 evidentiary hearing at the request of Gearhart’s defense attorney. During an evidentiary hearing, the government plans to ask for a 135 months sentence and Gearhart will introduce evidence in support of the 57 months’ imprisonment sentence he seeks.

While agreeing on most of the evidence that impacts sentencing, the prosecution and defense do not agree on who qualifies as a victim. Nevertheless, Judge Wright is free to sentence Gearhart up to the statutory maximum of 50 years in federal prison.

Even though Gearhart defrauded more than 1,000 victims , the government based its case on only several frauds including Gearhart’s largest, his Vista Del Hombre project in Paso Robles and as such Gearhart contends the court should consider only 18 victims when handing down his sentence.

On Monday, Judge Wright permitted victims to describe their losses. Statements the judge is required by law to consider when handing down Gearhart’s sentence.

Before the statements, United States Attorney Stephen I. Goorvitch asked the court if people the court may later determine are not victims could speak, the judge said all of the people Gearhart defrauded are victims.

“If someone has lost money or property to Kelly Gearhart, I want to hear from them,” Judge Wright said. “You are victims.”

Shawn Mackay asked if she could speak first. Mackay is the daughter of a man who trusted Gearhart, invested with him and made him trustee of his estate. An estate Gearhart was supposed to provide to Shawn Mackay and her sister after the death of their father Dan Mackay.

“I am a victim of Kelly Gearhart’s theft and deceit,” Mackay said. “It has been eight long years.”

In the end, Gearhart stole two homes, a railroad property and $184,000 from the Mackay sisters.

“Kelly, my dad loved you, we respected you, you were family,” Mackay said. “Our reward has been a personal betrayal and a financial loss we will never recover from.”

James Davis began investing with Gearhart in the 80s. After several successful investments, he told other family members about the opportunity.

When Gearhart stopped making interest payments in 2007, Davis discovered Gearhart had not even started on the projects his family invested in.

In the end, Gearhart swindled the Davis family out of more than $8 million.

“I am going to be 65 this summer,” Davis said. “This was my retirement, but I was young enough to recover.”

Davis told the court about an investor meeting held shortly after Gearhart stopped sending interest payments. The room was filled with about 500 primary elderly people including some with canes, in wheelchairs or on oxygen.

“There are 1,100 to 1,200 investors,” Davis said. “He took our money, we lost our homes. All the while Kelly is flying his jet to gamble in Vegas.

“He had no mercy for the investors, give him the maximum sentence.”

Peggy Vance addressed the court through a letter read by her husband Chris Vance because of health issues.

“I am sorry I could not be here to look this monster in the eye,” Vance wrote. “Shame on you Kelly Gearhart. There is not a maximum number of years. At least you will have food and a bed to sleep in, not like some of your victims.”

Amber Barnard assisted her mother Jennette Barnard to the podium to address the court. In 2008, her mother jogged four miles a day, now she walks with a cane.

“I speak on behalf of my mother because her health has deteriorated over the past eight years,” Amber Barnard said.

Jennette Barnard’s sister-in-law told her about investing with Gearhart, Atascadero’s citizen of the year. Jennette Barnard then told her other sister and all three women invested their money with Gearhart.

In 2008, Gearhart stopped returning the sisters’ calls, and the sister who had brought the alleged opportunity to the family had a heart attack and died and the third sister had a stroke.

When Amber Bernard discovered her mother had lost her car and was slated to lose her home, she sold her home in England and came back to the Central Coast to assist her mother.

Before the trial began, Gearhart sat glaring at Jennette Barnard before looking down and smirking.

“My aunt is dying and the fact that he looks at us,” Amber Barnard said. “What this man did to my family, the maximum sentence please.”

Nitsan Kolikant, the wife of a man who used to be one of Gearhart’s closest friends, also asked the court to give Gearhart the maximum sentence allowable by law.

“My Husband, Del Robasciotti, has known Kelly since high school,” Kolikant said. “When people said bad things about Kelly, Del always defended him.”

Gearhart convinced Robasciotti, who worked for Gearhart at the time making about $40,000 a year, to invest in his development projects. However, Kolikant had concerns and the couple asked for their money back.

In 2007, Gearhart gave the couple a check for $190,000. However, the project listed on the check was not the one the couple had invested in, Kolikant told the court.

Gearhart then started hounding the couple to reinvest the money claiming he owned the Vista Del Hombre project outright and as such it was a safe investment. The couple reinvested the $190,000 with Gearhart in the summer of 2007.

During that time investors were complaining that Gearhart was no longer making interest payments.

“Kelly said those F-ing investors, they got their money back in interest,” Kolikant said.

In Nov. 2007, Gearhart said he needed another $45,000 for just a few weeks and talked the couple into putting a mortgage on their home for what was  to be a short-term loan.

Shortly afterwards, the couple discovered Gearhart was selling his furniture and appliances at an estate sale. He then moved to Ohio after not only swindling the couple out of their investment, but leaving Robasciotti without a job.

After the victim’s spoke, Judge Wright asked that the audience stay seated while Kelly and Tamara Gearhart left the courtroom first in what appeared to be an attempt to avoid confrontations between the Gearharts and their victims.

Investors who lost money or property to Gearhart, and did not speak at Monday’s hearing, can speak at Gearhart’s sentencing hearing scheduled on June 29 at 1:30 p.m. in courtroom 11 at the United States Courthouse at 312 N. Spring Street in Los Angeles.

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When interest rates are so low for ‘safe’ investing, people look to risky investments. Banks don’t have to pay interest to savers, seniors are suffering, doing without to preserve their capital , reducing our ability to spend money to shore up the economy. How did this happen? Unfunded Bush wars and this all continues with the government ‘giving’ money to be ‘borrowed’ at low rates to those who can invest out into the future, while the ‘future’ of old people is now, and we got ripped off by failed government spending. Does anyone care? NO!, because they just care about themselves. We have all been told to save for a rainy day, etc., but unless you have a fat retirement check you live on social security and hope you don’t have any huge bills. Forget about nice things. We do without!

Waa was waa

You didn’t plan to fail, you failed to plan.

you are so wrong, I planned from the beginning. Getting a college degree, working 40 years, saving money, but with a private (non government job) I planned for my own future. Investing wisely, but depending on a safe place to put my money!! The Bush wars destroyed the economy of everyone (except their friends in Texas), and so we have a failed economy, and are paying back by ruining the middle class’s ability to thrive. I don’t know what part of this is so hard to understand? I did everything right , I could not see ahead to stupid. Seniors are doing without because of low interest rates on savings accounts. But, of course the rich can’t understand that!

Oh yeah even Bush has to be brought into the Gearhart crap. Fishing Village get a grip!

I haven’t heard mention in the comments that the da agreed not to prosecute the bitch wife. Looks like the innocent babe in the woods routine can work after all. She didn’t run the scams, but she certainly aided and abetted his felonious behavior and partook in the spoils of his ill gotten gains.

My opinion, they went too easy not going after her as well. That would be a deterrent to future con artists (maybe).

Thanks for the coverage, Karen.

An example of living life “high on the hog”

Never do business with a man whose stomach is wider than his shoulders.

That fat pig is lucky that Del Robasciotti never got his hands on him. What a POS.

Why hasn’t 20/20, 60 Minutes or one of those investigative shows covered this fiasco? Some reporter needs to head to Atascadero then Wadsworth, OH and interview some of Gearhart’s many victims.

I would sure watch that – good idea!

One of the saddest and most APPALLING things, was at the end. Right as they were moving all their stuff out of the house in Atascadero, Kelly and Tamara had their guys take 1/2-3/4 full dump truck, to the dump, filled of nothing but Gucci handbags, cloths and other things associated with. The appalling part? My understanding was that Tamara said, well I really don’t need this stuff. Hmm if you didn’t need, then WHY did you buy in first place?

Yes it was more ways to hid stuff. Where did I get this story? From his step mother. Oh and estimated value of $10,000 plus dollars. Sad.

what? he promised me 15% return, guaranteed, and i didnt get that, in fact i got ripped off?


Excellent point. Theses scams don’t work on prudent investors, only those who blindly trust and/or are driven by their own greed.